2010 New York Code
BSC - Business Corporation
Article 5 - (501 - 520) CORPORATE FINANCE
510 - Dividends or other distributions in cash or property.

§ 510. Dividends or other distributions in cash or property.
    (a)  A  corporation  may  declare  and  pay  dividends  or  make other
  distributions in cash or its bonds or its property, including the shares
  or bonds of other corporations, on its outstanding shares,  except  when
  currently  the  corporation  is  insolvent  or  would  thereby  be  made
  insolvent, or when the declaration, payment  or  distribution  would  be
  contrary   to   any   restrictions   contained  in  the  certificate  of
  incorporation.
    (b) Dividends may be declared or paid and other distributions  may  be
  made  either  (1)  out  of  surplus,  so  that  the  net  assets  of the
  corporation remaining after such declaration,  payment  or  distribution
  shall  at  least  equal the amount of its stated capital, or (2) in case
  there shall be no such surplus, out of its net profits  for  the  fiscal
  year in which the dividend is declared and/or the preceding fiscal year.
  If  the  capital  of  the  corporation  shall  have  been  diminished by
  depreciation in the value of its property or by losses or  otherwise  to
  an  amount  less  than  the  aggregate  amount  of  the  stated  capital
  represented by the issued and outstanding shares of all classes having a
  preference upon the  distribution  of  assets,  the  directors  of  such
  corporation  shall  not  declare  and  pay  out  of such net profits any
  dividends upon any shares until the deficiency in the amount  of  stated
  capital  represented by the issued and outstanding shares of all classes
  having a preference upon the distribution  of  assets  shall  have  been
  repaired. A corporation engaged in the exploitation of natural resources
  or  other wasting assets, including patents, or formed primarily for the
  liquidation of specific assets, may declare and pay  dividends  or  make
  other  distributions in excess of its surplus, computed after taking due
  account of depletion and amortization, to the extent that  the  cost  of
  the wasting or specific assets has been recovered by depletion reserves,
  amortization  or  sale, if the net assets remaining after such dividends
  or distributions are sufficient to cover the liquidation preferences  of
  shares having such preferences in involuntary liquidation.